Calvin Klein ‘Deceived’ Customers With Fictitious Discounts on Outlet Merchandise, Class Action Says

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Calvin Klein False Discount Class Action Lawsuit Overview: 

• Who: Cally Fallenstein filed a class action lawsuit against PVH Corp., which owns Calvin Klein. 
• Why: The plaintiff alleges Calvin Klein-branded products from a Calvin Klein outlet store in California were deceptively represented as discounted from a false reference price.
• Where: The class action lawsuit was filed in California federal court. 

Calvin Klein engaged in the “deceptive” business practice of advertising fictitious reference prices and corresponding phantom discounts on branded outlet merchandise sold in Calvin Klein outlet stores in California, a new class action lawsuit alleges.

Plaintiff Cally Fallenstein claims Calvin Klein, through its false and misleading marketing, advertising and pricing scheme, violated and continues to violate California and federal laws that prohibit the advertisement of goods for sale discounted from former prices that are false. California and federal law also prohibits the dissemination of misleading statements about the existence and amount of price reductions. 

“Retailers, including defendants, substantially benefit from employing false reference pricing schemes and experience increased sales because consumers use advertised reference prices to make purchase decisions,” the class action lawsuit states. 

The information available to consumers varies for different types of products, but consumers frequently lack full information about a product and, as a result, can incorporate information from sellers to make purchase decisions.

Fallenstein wants to bring the action on behalf of herself and other similarly situated consumers who have purchased one or more Calvin Klein-branded outlet products from a Calvin Klein outlet store in California that were deceptively represented as discounted from a false reference price. 

Class Action Claims Calvin Klein Engaged in False Discounting Practices 

The plaintiff’s allegations stem from her 2019 purchase of three women’s apparel products at the defendants’ San Diego outlet store. All items were advertised with a “MSRP” and a “sale” price. During her time at the store, the plaintiff noticed numerous signs within the store advertising a “__% off” over items throughout the store. She noticed that most, if not all, items in the store were accompanied by an in-store sign purporting to represent a “__% off.” 

After observing the “MSRP” of the items and the accompanying sale prices, the plaintiff believed she was receiving a significant discount on the items she had chosen, and also felt that the discounted price would likely not last, so she purchased the products. However, the merchandise the plaintiff purchased was never offered for sale at the listed “MSRP” reference price on the price tag. The plaintiff was damaged in her purchase because the defendant’s false reference price discounting scheme inflated the true market value of the products she purchased, the class action lawsuit claims. 

An investigation of Calvin Klein outlet stores conducted by Fallenstein’s counsel confirmed that the merchandise purchased by the plaintiff was priced with a false reference price and a corresponding discounted price for at least the 90-day period immediately preceding the plaintiff’s purchase in violation of California law and the Federal Trade Commission Act (“FTCA”). 

The plaintiff’s counsel’s investigators also cataloged the pricing practices of Calvin Klein outlet stores across several states, including California, and discovered that items listed for sale in the defendants’ outlets were never offered for sale at their full “MSRP” reference price. Additionally, the plaintiff’s investigation attempted to locate the items sold at the Calvin Klein outlet store in other distribution channels in the relevant market and verified that the merchandise sold at Calvin Klein outlet stores was not the same as Calvin Klein merchandise offered for sale at mainline Calvin Klein retail stores, as well as other stores.

“Thus, the ‘MSRP’ on the Calvin Klein merchandise sold at the defendant’s Calvin Klein outlet stores, including the ‘MSRP’ listed on the products plaintiff purchased, are either false original prices or severely outdated prices that have not been offered in the relevant market or at a Calvin Klein store for at least the three months (90 days) immediately preceding plaintiff’s purchase,” according to the class action lawsuit.

Fallenstein is requesting compensatory damages and declaratory and injunctive relief, including disgorgement and restitution, for herself and all Class Members. She would also like the defendants to engage in a corrective marketing campaign.

Have you purchased Calvin Klein outlet merchandise without knowing it was falsely discounted? Let us know in the comments! 

The plaintiff is represented by Todd D. Carpenter and Scott G. Braden of Carlson Lynch LLP.  

The Calvin Klein False Discount Class Action Lawsuit is Fallenstein, et al. v. PVH Corp., et al., Case 3:21-cv-01690-AJB-AGS, in the U.S. District Court for the Southern District of California.

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